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Dell's Dilemma: Overseas Cash, U.S Taxes

7/1/2013 2:33PM

Advisers working on Dell's $24.4 billion buyout are trying to solve a problem: how to use the computer maker's foreign cash without paying a $2.6 billion U.S. tax bill. Sharon Terlep joins digits. Photo: AP.

This transcript has been automatically generated and may not be 100% accurate.

... I ... while commit Digits I'm Simon Constable ... advisers working on Dell's twenty four point four billion dollars buyout are trying to catch how to use the computer maker's foreign cash ... without paying a two point six ... billion dollars U S tax bill ... Money Investing reported fount of joins us now ... this metric is my cousin to bring to bring the phone cash back and you get hit with a dividend tax yet said the U S will want your money if it's if it's in the US and now the acting ... now as we know has a lot of problems they don't have a ladder that ... free money lying around ... and most of their cash is overseas right now ... so there are ways to get around this mass will people are trying to figure out how to do rhyme seared seared begun looking at this one cents last year when the buyout was conceived that Blackstone the private equity firm that had thought about buying Dell decided beer nearly ended a process there was no way around it ... having the advisors to DAL and the company that buying Dell Silver Lake feel like they have they have a solution ... to muscle into choppier the wickedness of the last year ... when you you see that big jump of that's one of the plans to take it private are announced but then the actual execution of taking it private ... he is the real thing and that's why that was the the the the fourth line continues ... because when we have not seen it comes to many of the problem is is ... companies ... have ... this tax by dilemma Apple sold that were taken by issuing bonds priced or have coverage have to say is that this issue bomb right and is in a different situation in this case ... Dell Dell can complete the buyout unless it uses its own cash learning is healed I NetEase that overseas Kass as important to note the buyout will happen ... is is this mean it's you for ... Dell's new owners after the by now like this needs to be hammered out in order for the deal to get that ... that one of the things I know from from being a corporation is that you can take along this ... time as long as allies and opponents ... from Ben isn't counted as you know the same time you can take a loan from Europe says Corporation ... nominee to take a new nominee to head back into another line from one one the other soaps if you resist loans can be part of the strategy in one internal company to company long stringy I mean in the eight thousand but they're doing remain to be seen as a matter of loans specifically in this case as a potential solution one of the one and the scenarios that was look at early and what is the idea of ... creating an overseas and see that when in fact be the owner of Dell for the money really when you come back ... its that that that idea why is it and decided against early and that these are the kind of things they're looking at now what one of these when you when you take the company private it's a light like Dell it so that it is and ... given the scrutiny at all ... fourthly I mean it's an Danamon say Mr and in times of life for running insisted that the time to refocus on getting the business wire there and a very tough part of the business ... but it also means they tend to ... vote on that that's can squeeze every penny and so there's no room for error in this melody really is and I needed The and the amount of the deal ... is pretty much the amount of cash that's available I mean if he does that does that billions of dollars left over ... and whats interesting and this is that yes that is if ... they get the deal done and if there are nations that could be months or years before the IRS came cruising to those issues so ... can some enacting that's the case here but I mean in some cases ... e leading don't immediately running problem now one of things you wanna buy their wrist when when people looking for loopholes that they can find a loophole they do it the IRS and say that some employee and a lot to do it that one of ... the was a busy running the keys that business Readies Wii ever will Business ranting about why ... I guess the answer should not be yes we've avoided Taxes pregnant ... but ... it's a silly cat must amortize about Our Share admitted sending a lot of companies are doing added CPI if you look at some of everything feels that it happened to Caylee in health care we seen ... the health companies buying other health companies that are down this aisle than inland ... Irene in higher land where there's a favorable tax structure and so there's a there's all this kind of stuff going and ... create the image is talking to people around the Dell deal there is ... no a lot of sense if anyone to get something done that isn't going to be email that attacked by the IRS two years from now so that's why there's so many things working working and that's most people it been so sometimes ... butts in business for awhile thank you for that sound so ... all the Wall Street John all I'm Simon Constable and that was digits ...